While Dubai's villa and land market was dominated by British and Indian buyers in 2011, the apartment sector saw the biggest investments from GCC nationals.
Dubai's Land Department issued its annual report yesterday, claiming that a 20 per cent increase in property transactions in 2011 at a value of Dh143 billion is a sign that the real estate market is recovering and growing.
Sultan Butti Bin Mejren, Director General of the Land Departmentm said: "The transactions' quantity, quality and procedures reflect the recovery and growth of the real estate market in Dubai."
In 2011, the department's transactions reached 35,297, inclusive of sales, mortgages, ijarah (online registration fee), mortgage portfolios, deferred sales and other transactions.
The mortgages increased by 12 per cent in 2011 over those in 2010. 60 per cent of the transactions conducted in 2011 were mortgages.
Bin Mejren added that this trend indicates recovery for property financing.
Managing director of Harbor Real Estate, Muhannad Al Wadiya, said that the real estate sector in Dubai is witnessing positive sentiment.
"Moreover, 90 per cent of the developers are back to the market, and in the next five years they will be completing their projects," he said. Wadiya added that while challenges including confidence and access to liquidity still remain, rental returns were stable.
Al Wadiya said: "The rental returns in some areas of Dubai were estimated to be between 5 and 7 per cent in 2011 and it will continue the same this year."
Wadiya said that he was expecting a 10 to 15 per cent drop in office rents in the next three years due to oversupply.
"The demand for villas is high as there is limited supply. That is why prices have jumped."
Bin Mejren said that the value of transactions reflected the return of the real estate market to normal levels. It also indicated the exit of speculators, the maturity of the real estate market and increased investor awareness.
"This demonstrates the ability of Dubai to fully recover from the challenges of the international crisis and prove once again the strength of Dubai's economy," he said.
Bin Mejren emphasized that the market has seen a state of stability and increased demand from investors in buying properties and grasping investment opportunities in the last two years.
Land Department figures reveal that the heaviest investment was in apartments through sales and mortgages, accounting for 26,465 transactions worth Dh43 billion.
Sales of land stood at a value of Dh22 billion with a total of 2,961 transactions.
The value of mortgage transactions amounted to Dh69 billion from a total of 3,315 transactions.
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